After a prolonged period of rapid growth underpinned by a booming economy and government incentives for car purchase, China’s car market appeared to slow sharply in February.

Sales of passenger cars in February increased just 2.6% from a year earlier to 967,200 units according to data released by the China Association of Automobile Manufacturers (CAAM).

February marked the slowest pace of growth since January 2009.

However, analysts noted that February last year was a strong month, pushing up the comparative base.

In the January-February period, 2.5m passenger vehicles were sold in China, up 10.5% from last year.

It is widely expected that China’s car market will slow in 2011 in response to government measures to an overheating economy and the removal of incentives for car purchase.

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By GlobalData

Some analysts are speculating that a price war could break out this year as OEMs look to maintain ambitious volume targets in the face of cooling demand.